GSA seeks savvy federal IT shop for buying pilot

The General Services Administration announced with much fanfare last January that it would spearhead an effort to introduce a share-in-savings program for federal agencies.

Twelve months later, however, GSA officials say they have not found an adequate project.

The share-in-savings concept, where vendors are paid based on demonstrated results, is untested at the federal level. The approach, through which vendors are paid in part with the savings their systems recoup, has been used successfully by state and local governments.

At a conference a year ago, GSA officials said they intended to find five agencies for pilots by the spring. Then in June, officials said they were close to selecting a pilot project [GCN, June 7, 1999, Page 1].

GSA had been working with officials at the Defense and Transportation departments, but DOD and DOT officials decided against using the share-in-savings approach, said Kenneth Buck, assistant to the commissioner of GSA's Federal Technology Service.

As the months have passed, GSA officials have said they are still behind the project but they must find the right program for a pilot.

Leap of faith

'We're not looking for a target date. We're looking for the right opportunity,' Buck said.

Buck acknowledged that the concept has required more of a mind shift than proponents originally anticipated. That has made it difficult to find the right project, he said.

As with many new concepts, agencies are rushing to be second, said Charles 'Chip' Mather, senior vice president of Acquisition Solutions Inc. of Chantilly, Va., and a former Air Force procurement executive.

FTS commissioner Dennis Fischer said FTS is working to educate people about the concept. He compared the share-in-savings initiative to FTS' Seat Management Program, which also has been a slow-growing effort.

'This is not a way to fly under the radar screen,' said Steven Kelman, a professor of public management at Harvard University's John F. Kennedy School of Government and an ardent proponent of the share-in-savings concept.

If a project cannot get funded otherwise, there are probably questions about a project's business case, he said. But for the share-in-savings concept to work, a project needs a 'grand-slam home run business case,' Kelman said.

FTS is working with the Agriculture Department's National Finance Center on what could be a model for a future share-in-savings project.

NFC director John R. Ortego said the center's planned buy does not fit exactly into the share-in-savings mold. He said share-in-results more aptly describes the development of a new payment system at the center.